Mar 31, 2014
1.1 Basis of preparation of Financial Statements:
The Financial Statements have been prepared in accordance with the
generally accepted accounting principles (''GAAP'') applicable in India
under the historical cost convention on accrual basis. These financial
statements have been prepared to comply in all material aspects with
the accounting standards notified under Section 211 (3C), Companies
(Accounting Standard) Rules, 2006, as amended from time to time and the
other relevant provisions of the Companies Act, 1956 read with General
Circular 8/2014 dated 04th April, 2014 issued by the Ministry of
Corporate Affairs.
All Assets and Liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in Schedule VI of the Companies Act, 1956.
1.2 Use of Estimates:
The preparation of Financial Statements in conformity with GAAP
requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosures relating to contingent liabilities as of the date of the
financial statements. Actual results could differ from these estimates.
Difference between the actual results and estimates are recognized in
the period in which the results are known / materialized. Management
believes that the estimates used in preparation of financial statements
are prudent and reasonable.
1.3 Cash Flow Statement:
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short- term balances (with an original maturity of
three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.4 Tangible Assets:
Tangible Assets are stated at cost (or revalued amount as the case may
be) less accumulated depreciation and accumulated impairment losses if
any. Cost Comprises purchase price and any other attributable cost of
bringing the asset to its working condition for its intended use.
Subsequent expenditure related to an item of fixed asset are added to
its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Gain or loss arising from de-recognition of assets are measured as the
difference between the net disposal proceeds and the carrying amount of
the assets and are recognized in the statement of profit and loss when
the asset is derecognized.
Depreciation on fixed assets is provided on written down value method
(WDV) at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956 over their useful life.
Depreciation of asset sold / discarded during the period is
proportionately charged. Individual low cost assets (acquired for less
than Rs 5000/-) are depreciated within a year of acquisition.
Intangible assets are amortized over their estimated useful life on a
straight line basis.
1.5 Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
1.6 Impairment of assets:
As on Balance Sheet date, the Company reviews the carrying amount of
Fixed Assets to determine whether there are any indications that those
assets have suffered "Impairment Loss". Impairment loss, if any, is
provided to the extent, the carrying amount of assets exceeds their
recoverable amount. Recoverable amount is higher of an asset''s net
selling price and its value in use. Value in use is the present value
of estimated future cash flows expected to arise from continuing use of
an asset and from its disposal at the end of its useful life.
1.7 Revenue Recognition:
Income and expenditure are recognized and accounted on accrual basis as
and when they are earned or incurred. Revenue from sales transaction is
recognized as and when the significant risk and reward attached to
ownership in goods is transferred to the buyer. However leave with
wages and bonus is accounted on cash basis.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sale price and
the carrying value of the investment. Interest income is accounted on
accrual basis. Dividend income is accounted for when the right to
receive it is established.
1.8 Employee Benefits:
Short term benefits and post employment benefits are accounted in the
period during which the services have been rendered.
1.9 Foreign Exchange Transactions:
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the respective transactions.
Foreign Exchange monetary items in the Balance Sheet are translated at
the year-end rates. Exchange differences on settlement / conversion
are adjusted to Profit and Loss Account.
1.10 Tax Expense:
Tax expenses for the year comprise of current tax and deferred tax.
Current tax is measured after taking into consideration the deductions
and exemptions admissible under the provision of Income Tax Act, 1961
and in accordance with Accounting Standard 22 on "Accounting for Taxes
on Income".
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred Tax represents the tax effect of timing differences between
taxable income and accounting income for the reporting period and is
capable of reversal in one or more subsequent periods. Deferred tax are
quantified using the tax rates and laws enacted or substantively
enacted as on the Balance Sheet Date.
Deferred Tax Assets are recognized and carried forward only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. Deferred tax asset on unabsorbed depreciation and
carry forward of losses are not recognized unless there is virtual
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
1.11 Contingent Liabilities and Provisions:
Provisions are recognized only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made.
Contingent Liability is disclosed for
a. Possible obligation which will be confirmed only by future events
not wholly within the control of the company or
b. Present obligations arising from the past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made.
c. Contingent Assets are not recognized in the financial statements
since this may result in the recognition of income that may never be
realized.
1.12 Earnings per Share:
In determining the Earnings Per share, the company considers the net
profit after tax including any post tax effect of any extraordinary /
exceptional item. The number of shares used in computing basic earnings
per share is the weighted average number of shares outstanding during
the period.
The number of shares used in computing Diluted earnings per share
comprises the weighted average number of shares considered for
computing Basic Earnings per share and also the weighted number of
equity shares that would have been issued on conversion of all
potentially dilutive shares.
In the event of issue of bonus shares, or share split the number of
equity shares outstanding is increased without an increase in the
resources. The number of Equity shares outstanding before the event is
adjusted for the proportionate change in the number of equity shares
outstanding as if the event had occurred at the beginning of the
earliest period reported.
1.13 Segment Reporting:
The generally accepted accounting principles used in the preparation of
the financial statements are applied to record revenue and expenditure
in individual segments.
Segment revenue and segment results include transfers between business
segments. Such transfers are accounted for at the agreed transaction
value and such transfers are eliminated in the consolidation of the
segments.
Expenses that are directly identifiable to segments are considered for
determining the segment result. Expenses, which relate to the company
as a whole and are not allocable to segments, are included under
unallocated corporate expenses.
Segment assets and liabilities include those directly identifiable with
the respective segments. Unallocated corporate assets and liabilities
represent the assets and liabilities that relate to the company as a
whole and not allocable to any segment.
Mar 31, 2010
(a) The Gross Block of Fixed Assets is stated at Cost.
(b) Depreciation on Fixed Assets has been provided at the rates
specified in Schedule XIV of the Companies Act, 1956 on written down
value method except on Saputara Guest House and Television Set.
(c) Income & Expenditure are recognised on Mercantile basis.
2. Investment have been stated at Cost
3 Taxes on Income:
(a) Current Tax:
Provision for income tax is determined in accordance with the
provisions of the Income Tax Act, 1961.
(b) Deferred Tax Liability:
The difference that results between the profit offered for Income Tax
and the profit as per the Financial Statements are identified and
thereafter, a deferred tax asset or deferred tax liability is recorded
for timing difference, namely the difference that originate in one
accounting period and reversed in another based on the tax effect of
the aggregate amount being considered. The tax effect is calculated on
the accumulated timing differences at the end of an accounting period
based on the prevailing enacted or substantially enacted regulations.
Deferred Tax Assets are recongnized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective value at each balance sheet date.
6 The company has not demateriatised following shares in its Demat
Account. In this regard reliance is placed on the certificate issued by
the managerment to the effect that the said shares are held in physical
form and that they are lying in the safe custody of the management.
7 Paami Textile and Investments Ltd. has been amalgated with the
company on and from 26/12/2008 in terms of the Order of the Honourable
Gujarat High Court dated 14/10/2008, However the company has continued
to hold the demat accout and the bank account in the name of Paami
Textile and Investments Ltd. for the shares and the funds respectively
belonging to the erstwhile Paami Textile and Investments Ltd. which has
got amalgated with the company on and from 26/12/2008.All the entries
of these demat account and bank account have been accounted for in the
books of the company i.e Surbhi Chemicals and investments ltd